Monday, 21 October 2013

In order to
persuade the French company EDF to build Britain’s next nuclear power station,
the UK government has agreed to guarantee the price of the electricity generated
will be double today’s prices. Commercial providers require a robust business
case to be able to mobilise the capital required and the government has decided
that it wants additional nuclear capacity. This is, therefore, a logical outcome,
but logical does not mean it is sensible.

First, this
is not UK technology built by UK engineers and funded by UK investors. The
reactor will be built at Hinkley Point on the Somerset coast by a French company
using Chinese money. For something as sensitive as a nuclear reactor it should be
deeply worrying that we rely on France and China. I am not accusing either our
close allies France or our distant rivals China of anything other than purely commercial
motives, but that is the problem. This is safety-critical infrastructure with
long-term liabilities. It has become normal for commercial operators to stick
with a project whilst it is delivering bottom-line returns and walk away when
the numbers no longer look attractive. Whatever guarantees the UK government might
seek, the ability of corporations to fold their operations when they are no
longer commercially viable is unstoppable. EDF and Chinese investors will put
into the project a huge investment and draw out of it a huge return, then, walk
away. At the end of the reactor’s life there will be a liability for many
generations into the future long after we have used the energy, and long after
the French and Chinese have left.

Second, this
long-term guarantee over energy prices should be offered to other low-carbon
energy providers to see what proposals they could come up with. The doubling of
energy prices is exactly the incentive that would send the renewable energy
industry into overdrive. There are problems to address such as intermittency of
supply but these are not show-stoppers, just great challenges for the engineers
to solve. Instead of a special case to ensure we have nuclear power, nuclear
should be fighting its case against other low-carbon solutions.

Third, the government
would be better employed winning the political case for higher energy prices ‒ which
is the realistic way forward ‒ free of government subsidy. Business is a very
capable agent for change but not if its hands are tied to by politicians using
smoke and mirrors to hide the unpopular reality that a low-carbon future is one
of valuable energy where bills are affordable because we become very careful
with what we use. Forward-looking government officials can see that moving
quickly with raising taxes on fossil fuel to drive the price of energy from
these sources to the levels required is sensible economics. This could raise
cash to invest in low-carbon public infrastructure or their political masters
could decide to use this income stream to reduce other taxes to make it politically
more palatable.

Politicians
are paralysed with fear that to tell the truth will cost them votes so we end
up with dangerous delaying tactics such as this special case for nuclear power.
Sometimes we manage to strike a cross-party
consensus on issues of prime national interest; has the time come to do this for
the future of UK energy supplies?

Monday, 30 September 2013

We seem to
be living in cloud cuckoo land where we can carry on regardless despite our
environmental and economic woes. The political Left and Right trade punches as
if nothing substantial needs to change. Our politicians’ work to court popular
opinion, not use logical analysis to reach conclusions that lead to action. What
of the notion that our leaders should be trying to work out what is best for
society and then trying to make it so? This seems sensible to me but the
politics of spin seems to be all about populism not about bold leaders who
persuade the population to follow them in doing what is right and necessary. In
this political climate, the output of focus groups has more influence than the
opinion of experts when it comes to setting policy.

In the same
week that the world’s leading climate scientists finalise a report that makes deeply
disturbing reading, Ed Milliband announces that he will freeze energy prices if
he is elected as Prime Minister. Astonishingly, his popularity has risen as a
result, instead of sealing his fate through championing policy that will lead
us yet deeper into trouble. In cloud cuckoo land, we like such policy so we can
keep living our lives without worrying about what tomorrow may bring. This
would be an amusing aside worthy of a Wallace and Gromit story if the Labour
Party was not making the promise with a straight face and people were not
taking it at face value without looking beyond the sound bite to what it would
mean.

Cheap energy
prices have fuelled our economy for as long as anyone can remember based on
cheap fossil fuel. To kick the habit of fossil-fuel dependency means energy
prices must rise. The Conservative Party are not much better as they are
reported considering reining back on incentives for renewable energy to limit the
levy on fuel prices. Our politicians are vying to have us all live in cloud
cuckoo land, where Wallace will be elected Prime Minister (with Gromit as the
Chancellor of the Exchequer), energy prices will be pegged and the warming
climate will lead to nothing more worrying than the possibility of better English
wine.

As the
winter draws in we can look to what to do over Christmas to enjoy the season of
excessive eating, copious drinking with the thermostats turned up high. Instead
of planning to go to see Santa in his Grotto in the local department store, why
not book a day trip to Lapland. With all the money that we should be spending
on insulation to keep our energy use (and bills) in check we could fly to
Finland, have a ride on a real reindeer sledge and see Santa in his mountain
grotto. This is the offer I found in this weekend’s papers for the ‘small’
price of £500 per person. It doesn’t matter that this trip has a higher carbon
footprint than an entire village for a year in Bangladesh. Such a village is
likely to be flooded by rising sea levels in any case so what “what the hell”
let’s put on our big carbon dancing boots and be merry.

With Wallace
in charge, he is bound to come up with some contraption that will make it
alright. This could be huge set of bellows to capture the hot air from our
politicians and drive a machine to generate power to keep cloud cuckoo land
running smoothly without us noticing any disruption. This is a good place to be
until reality intrudes…

Real Sustainability

The Sustainable Revolution

About Me

My books take a real-world approach to delivering green outcomes.
‘Adapt and Thrive: The Sustainable Revolution’ describes my vision of a truly sustainable world and how to achieve it. 'Victim of Success: Civilization at Risk' is a call for real action to reduce our impact on the planet. 'Green Outcomes in the Real World' shows how sustainability can be brought into a real-world context. 'Fly and be Damned' shows how insisting on action on emissions from aviation will launch the next golden age of aviation.
Go to my Web Page for blog entries back to 2007.
www.petermcmanners.com